By Frank Tang and Clara Denina
NEW YORK/LONDON (Reuters) - Gold climbed 1.3 percent on Tuesday after President Barack Obama won the backing of two top Republicans in Congress in his call for limited U.S. strikes on Syria to punish President Bashar al-Assad for his suspected use of chemical weapons against civilians.
Bullion prices reversed initial losses after John Boehner, the Republican speaker of the U.S. House of Representatives, and House Majority Leader Eric Cantor both pledged their support for military action in a boost to Obama.
"When we see headlines that are supportive for a possible attack on Syria, you see gold catch a bid and the U.S. equities pull back their gains," said Michael Matousek, head trader at U.S. Global Investors which has about $1.2 billion in mutual-fund assets.
Investors often move into gold as a safe haven in times of geopolitical tension.
Anticipation of traditionally strong physical demand in September, when Indian jewelers stock inventory ahead of Hindu festivals that are major gold-buying events, also boosted the precious metal, Matousek said.
Spot gold rose as high as $1,416 an ounce and was last up 1.3 percent to $1,411.86 an ounce by 2:30 p.m. EDT (1830 GMT).
U.S. Comex gold futures for December delivery settled up $15.90 at $1,412.00.
Trading volume was about 15 percent above its 30-day average, preliminary Reuters data showed, partly boosted by pent-up trading as U.S. markets were shut on Monday for the Labor Day holiday.
Earlier, geopolitical tensions sparked gold's gains after Israel tested a U.S.-backed missile system in the Mediterranean on Tuesday without advance notice. Russia detected the launch and made a disclosure which briefly put world markets on edge as traders looked for any sign of an attack on Syria.
Among other precious metals, silver was up 0.7 percent to $24.30 an ounce. Platinum rose 1.4 percent to $1,534.74 an ounce and palladium gained 0.4 percent to $715.22 an ounce.
(Editing by Jim Marshall)
- Commodity Markets
- President Barack Obama
- John Boehner